Baidu: Grossly Undervalued At Normalized PE Of 10

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About: Baidu, Inc. (BIDU)
by: Oriental Trader
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Oriental Trader
Macro, long/short equity
Summary

Baidu is grossly undervalued: ex-cash, ex-equity investment normalized P/E is around 10.

Baidu’s recent earnings dip is likely temporary, as it maintains a structural advantage in its core business: search advertising.

Baidu appears to be capable of holding its own against its main competitor (Toutiao), which has wreaked havoc on Baidu for the past year.

Even if Baidu’s fundamentals do not significantly improve, its existing valuation is likely very low.

Baidu(Nasdaq: BIDU) is a company that has been mired in controversy in the past few years. It used to be considered top tier and on the same level as Alibaba (Nasdaq: BABA) and